Have we finally reached the point where computers,
software and
telecommunications can do your job cheaper
and faster than you? For many
occupations, the answer is yes

It's 5 a.m. An autumn morning in East Vancouver.
The sun hasn't yet risen
over the eastern horizon, but here at the
corner of Commercial and Broadway a
lineup of yawning men stretches two abreast
east towards Victoria Drive. Some
arrived here at the office of the temporary
agency Labour Ready as early as 4:30
a.m. They shuffle in the pre-dawn cold, waiting,
hoping for the chance at
another day of minimum-wage labor.

By 7 a.m as many as 200 of the early morning
shufflers will have been placed
at construction sites and warehouses throughout
Vancouver. Business is booming,
and not just for this one agency. For walking
fingers it's a 9 1/2-page trudge
through the Yellow Pages listings for Employment
Agencies. Each day more than
200,000 temps nationwide - including accountants,
lawyers, software engineers
and research scientists - eke out another
day's wages. At approximately 40,000
workers, BC's temp agencies employ as many
people as the mining, fishing and
forestry industries combined. As a group,
contingent workers - temps,
part-timers, contractors, and the self-employed
- make up over 39 per cent of
the Canadian workforce, up from 35 per cent
just four years ago.

Over on West 6th there's another lineup -
this one slightly scruffier -
outside the office of the Canada Employment
Centre. When the federal Liberals
took over in 1992 they re-christened the
department that runs this office Human
Resources Development Canada, but about all
that changed was the letterhead. The
unemployment rate remained stuck at its decade-long
plateau of just under 10 per
cent (8.7 per cent in B.C., 20.7 per cent
in Newfoundland).

The tale doesn't end there. Six-and-one-half
per cent of British Columbians
have given up looking for work; 5.25 per
cent of workers are stuck working
part-time when they'd rather be full-timers.
Lumping the un-, under-, and
unlikely-to-ever-again-be employed all together
yields the discouragingly
Depression-era result that fully 20 per cent
of those who want to work
full-time, can't. Mix in those contingent
workers and you discover that less
than half the working population has the
kind of steady full-time employment
normally associated with the word job. This,
after three years of steady
economic growth. Clearly, something is afoot.

Whatever it is, the trend is not confined
to B.C. The jobless recovery is a
fact of economic life in all OECD nations.
According to Forbes magazine, it's
nothing to worry about. Work isn't disappearing,
it's just being repackaged in
altogether more pleasant ways that generally
tend not to involve having a
job.

American author Jeremy Rifkin, on the other
hand, has a more sobering
diagnosis. Rifkin believes the layoffs, the
unemployment, under-employment, the
contingent and involuntary part-time labor
are early signs of a malady that will
eventually prove terminal. He believes we
are seeing the end to the era of mass
employment - in effect, an end to work itself.

Rifkin's thesis, outlined in a 1994 book
entitled The End of Work, is simply
that information technologies (IT) - computers,
software and telecommunications
- have finally gotten fast enough, cheap
enough and ubiquitous enough that
corporations are more and more able to produce
goods and provide services with
little requirement for human beings. The
breakthrough in information technology,
Rifkin argues, came sometime in the early
'90s, when IT managers figured out how
to rearrange corporate procedures such that
large numbers of middle management
were suddenly made redundant. The downsizing
knives came out, and layers of
middle management were flayed away.

Bill Watson was one of those caught by the
carving knife. The head of the
Bank of Canada's agency section in Vancouver,
Watson is set to become redundant
early next year when the 58 people he manages
are permanently laid off. The work
they used to do - processing large bond and
currency transfers - will be taken
over by a computer system located in Ottawa.
Watson himself plans to opt for
early retirement. His nearly 60 employees
are only beginning to consider their
options. "I think the employees were kind
of stunned at first," says Watson.
"Most people work at places like the Bank
and government for security, always
recognizing that while the pay is not great
at least you have a job. I guess
we're finding out that you have neither."

Throughout the '90s workers in both the public
and private sector have been
making the same discovery. In 1995 the already
profitable U.S. telephone giant
AT&T announced it was chopping more than
77,000 of its management personnel
in an effort to increase profit margins.
Eastman Kodak reduced its management
levels from 13 to four, and laid off thousands.
In all, downsizing cost U.S.
firms 375,000 jobs in 1995 - more than 1,000
jobs each and every day of the
year.

North of the border in 1995, Bell Canada
announced a three-year plan to cut
12,000 people from its workforce of 46,000.
In B.C. the five largest public
companies, including MacMillan Bloedel, Westcoast
Energy and BC Telecom, reduced
their workforces by nearly 29 per cent from
1989-1995, while increasing revenues
by more than 66 per cent MacMillan Bloedel,
for example, increased its revenues
by over $2 billion, or 75 per cent, between
the years 1989 and 1995, at the same
time as it eliminated over 4,000 employees,
34 per cent of its B.C.
workforce.

In Rifkin's view, developments like these
will continue and accelerate in
years to come, and society will be forced
to cope with a structural (that is to
say permanent) unemployment rate somewhere
in the mid 20s or higher.

Not everyone accepts Rifkin's reasoning,
of course. Textbook economic theory
argues that the three outcomes of capital-intensive
automation - lower prices,
higher corporate profits, or higher wages
- all result in more money in the
economy, more demand and more jobs. The real-world
proof of this theory, critics
argue, is the current U.S. unemployment rate
of 5.5 per cent.

In a phone interview from his home base in
Washington, DC, Rifkin counters
this argument by pointing out that the U.S.
rate doesn't include the four per
cent of Americans who have given up looking
for work, the five per cent
involuntarily working part-time, nor the
three per cent of American males
currently in jail or on bail. "Just adding
in the number of people who have
stopped looking," says Rifkin, "and the number
of people who are temporaries who
used to have full-time employment, and the
unemployment rate is hovering at 14
per cent." Comparable to Europe, or British
Columbia.

Textbook economists also make the point that
the process of capital replacing
labor is hardly new. When tractors and combines
replaced horses and field hands,
workers simply shifted over to the industrial
sector. As robots landed on the
manufacturing floor, workers trooped over
to the service sector.

Automation, however, has finally hit the
service sector, home to more than 70
per cent of the province's workers. Banking
- picked by the Fraser Institute as
one of the winners of B.C.'s new service
economy - is expected to lost about
35,000 jobs in Canada over the next 10 years,
according to a Deloitte &
Touche study. Like Bill Watson's job at the
Bank of Canada, most of these losses
will be the result of computer-driven automation.
Some of the cuts have already
begun.

In late 1994, for example, the Royal Bank
chopped 3,500 people from its
workforce, followed by the Bank of Montreal
which cut 2,000 jobs in September,
1995. In early 1996 CIBC announced it was
merging backend processing operations
with the Bank of Nova Scotia, a move that
will affect about 4,800 employees from
CIBC and 1,800 from ScotiaBank.

B.C.'s largest credit union, VanCity Savings,
announced in September that it
planned to expand its services across Canada,
all without opening a single new
branch. It will be a 'virtual bank'. Customers
will access their accounts via
ATMs, phone lines or the Internet.

According to Richard Wafer, vice-president
of information systems at VanCity,
the technological transformation of the banking
sector is inevitable. "What's
happening in banking is the same thing that's
happening to the rest of the
business world; it's becoming more and more
self-serve. One of the reasons
VanCity is spending a lot of money and a
lot of time thinking about technology
is simply because we believe that if we don't,
we'll become fairly
irrelevant."

In other words, customers are demanding the
convenience of out-of-branch
banking.

VanCity is loathe to share information on
the relative costs of in- and
out-of-branch banking, but it's clear that
cost savings is another big reason
behind the corporate commitment to automated
banking technology. According to a
recent study of the banking system, a machine-mediated
ATM withdrawal costs only
46 cents, compared with $2.46 for a withdrawal
mediated by a live human
being.

Currently more than 70 per cent of VanCity's
transactions take place outside
a branch, either on an ATM, a point of sale
machine or over the phone. Wafer
believes that figure will rise in a year
or so when cash cards come into general
usage and it becomes possible for customers
to make cash withdrawals over the
phone. Bank tellers will become even more
dispensable.

Socially-conscious VanCity takes some pride
that instead of laying people off
it has retrained its tellers to take on more
complicated tasks, like advising
customers on how to best invest their money,
but even this so-called 'smart
work' may soon be taken on by a computer
system. Already loan and mortgage
applications can be made via VanCity's on-line
banking package. At the moment it
serves only as a kind of electronic form,
collecting information from the
customer so that it can be viewed later by
a loan officer. According to Wafer,
however, creating an artificial intelligence
program to evaluate the loan or
mortgage application and give an answer yea
or nay would not be overly
difficult. (In fact, the Japanese have already
done it with Mujinkun, or Mr.
Unmanned, the world's first robotic loan
officer.)

Outside the banking sector, cash and debit
cards are already making store
cashiers more efficient, and thus less necessary.
Combined with do-it-yourself
laser scanners, cash and debit cards could
eliminate the need for cashiers
entirely. And that's just the beginning of
the productivity gains to be had in
the service sector.

"Agent jobs, the kind where one person does
something for another, are
already going," says Roslyn Kunin, a Vancouver
economist who specializes in
predicting future labor trends. Travel agents,
for example, are being squeezed
by ticketless airlines like Kelowna-based
Westjet, and by people who simply make
their own travel plans using the Internet.
Kunin herself recently planned an
extended walking tour of the Maritimes using
the World Wide Web. So many
travelers are doing the same that airlines
are beginning to cut the commissions
offered travel agents.

Stockbrokers are another sort of agent job
that may not be long for this
world. Already services like E*TRADE and
the TD Bank's Green Line allow people
to buy and sell stocks over the Internet.
True, securities regulations dictate
that a licensed broker perform the actual
trade, but in the current era of
deregulation it's doubtful that such guild-like
work restrictions can last for
long.

Other service occupations, like the so-called
pink collar office jobs -
typists, secretaries, file clerks - traditionally
held by women will continue to
be phased out in favor of the desktop PC.
Kunin estimates that there will be
nearly 40,000 fewer clerical jobs in B.C.
by 2005.

Rifkin's critics reply to these obvious and
continuing service sector job
losses with one final argument - the 'picnic'
hypothesis. Technology, they say,
will create just as many jobs as it eliminates.
They can't say what the jobs
will be, or even what sector they'll be in,
but like ants at a picnic, they're
sure to turn up sooner or later.

David Bond of the Hongkong Bank of Canada
is an ardent picnicker. "In 1958,
when I was writing my PhD thesis," says Bond,
"I used carbon paper. Now try find
a sheet of carbon paper. All the people who
worked in the carbon paper industry
are no longer employed doing that. However,
building all the copy machines, and
repairing all the copy machines have more
than made up for the losses."

The knowledge sector is often touted as being
the best source of new good
jobs, but unfortunately for British Columbians,
opportunities in the province's
high-tech sector are comparatively few, with
only two per cent of the total
workforce employed in the high-tech sector.
On a per-capita basis, B.C. employs
fewer than half the number of high-tech workers
as Ontario or Washington, and
according to the Science Council of B.C.,
things are unlikely to improve anytime
soon.

B.C. does have its success stories in the
high-tech field, however, among
them the new fuel cell being developed by
Ballard Power Systems in Burnaby. SFU
professor Lindsay Meredith believes Ballard's
fuel cell will be the automobile
power plant of choice in the next century.
Its effect on industry, he says,
could well be as revolutionary as that of
the internal combustion engine or,
more recently, the personal computer. The
employment dividends to B.C. could be
enormous.

According to Rifkin, picnickers like Bond
and Meredith are missing the point.
"In the information age," says Rifkin, "if
an entrepreneur invents a new
product, he or she can manufacture that product
in a near workerless factory. He
can market it with a virtual company using
a just-in-time workforce. So while
the information age will produce good jobs,
high paying jobs, it will not
produce mass labor. The information age is
based on the idea of elite, boutique
labor."

The Bank of Canada layoffs are a case in
point. At the same time the Bank
closed down the Vancouver agency section
- eliminating 58 medium-skill clerical
workers, and one manager with over 30 years
of service - the analysis section
expanded, creating exactly two new jobs for
highly-skilled financial analysts.
It's a pattern that's being repeated throughout
the economy. If Rifkin is
correct and the trend continues, then the
already large gap between rich and
poor workers will widen in the future.

Perhaps as compensation, those with less
money will have more time on their
hands. A Statistics Canada study published
last spring found that those with
highly-developed skills are working longer
and longer hours, an average of 46
hours a week, up from 42 only two years ago.
Those with comparatively lesser
skills work less, an average of 32 hours
a week.

In a 1992 study of the B.C. economy, Roslyn
Kunin coined the term 'layer
cake' to describe this stratification of
the workforce. Frantically licking the
icing on the top layer are the 32.2 per cent
of the workforce with
highly-developed skill sets. These are the
research scientists, design
engineers, software analysts, public relations
specialists, investment bankers,
management and tax consultants, architects,
financial and tax consultants,
strategic planners, film producers, art directors,
writers, editors and
journalists that comprise Rifkin's 'elite,
boutique' workforce. They tend to be
very highly paid, very busy and very stressed.

Down in the dregs are the 47.7 per cent of
the B.C. workforce with only low
skills. They exist to provide poorly-paid,
low-skill services for the
time-crunched knowledge workers. Squished
in the middle of the cake is the 20.1
per cent of workers with medium skills. Occupants
of this layer, says Kunin, can
expect times to be especially lean in years
to come, as demand for
medium-skilled folks withers away.

"You're going to see a polarized two-tier
society," says Rifkin. "Very good
jobs at the top - not mass but elite - and
a lot of menial jobs at the bottom.
What we're going to be missing are the middle
class jobs that were created in
the industrial revolution that led to bourgeois
culture and a democratic form of
government."

The worry that the information revolution
might eventually undermine
democracy is very much a part of European
political thinking. In a 1993 speech,
German Chancellor Helmut Kohl observed that
"more people are unemployed in
Chemnitz, Leuna and Frankfurt an der Oder
than in 1933, when people there
elected the Nazis." An awareness of democracy's
fragility has been at least
partly responsible for the broad, business-labor
consensus behind German and
European efforts to deal with unemployment.

Here on the Pacific coast, however, business
leaders seem much less concerned
about downsizing and unemployment. The CEOs
of B.C.'s largest companies,
including MacMillan Bloedel, Fletcher Challenge
and BC Tel, all declined to be
interviewed about their views on these changes.
Interesting, considering that BC
Tel, for example, has reduced its workforce
by about seven per cent in the past
few years and considering further that many
telecom analysts believe the company
will have to downsize even further if it
hopes to remain competitive.

According to David Cawood, a management consultant
who helps companies deal
with change, few business people fully accept
the fact that there is a
revolution underway. "Many of the companies
I work with are doing their best to
cope with change," says Cawood ,"and some
are doing quite well, but they all
vastly underestimate the degree of change
required." The temptation, it seems,
is simply to muddle through and hope for
the best.

Economist Roslyn Kunin, for example, sees
no reason to make special provision
for the downsized and the delayered. "People
don't lay down and die when there
are changes," says Kunin. "I see people already
making adjustments away from the
sort of 'dental plan jobs' and towards the
new economy." She's right. Some
are.

When Lillooet native John Duncan was downsized
from his job as a mill foreman
a few years back, he went out and found a
job selling life insurance. Later he
switched to selling long distance phone time
for Westel, and then, just this
summer, he branched into the tourism industry
by buying a small company that
rents bikes to tourists on the Penticton
waterfront. A self-described red-neck,
Duncan shares Kunin's belief that it's unnecessary
to make any sort of provision
for those forced out of the manufacturing
world. "Maybe those guys should have
thought ahead and saved up some of that good
coin they were pulling in, instead
of blowing it," he says.

In Duncan's view, making the switch is just
a matter of getting off your duff
and trying. He will admit, however, that
the stress of making the adjustment to
the new economy cost him his marriage. He'll
also admit that he's now working
longer hours, for less money.

In that, he's much like other workers in
B.C. The tough ones, the ones that
learned to market themselves and network
like mad, have managed to get jobs. But
they're also getting poorer. The average
weekly wage in B.C. has declined
steadily over the past decade, from $440
in 1986, to $432 in 1995.

Not surprisingly, B.C.'s retail sector has
lately been feeling the pain. This
erosion of purchasing power is one of the
trends Rifkin believes will eventually
convince business leaders to embrace his
solutions for dealing with the
long-term loss of mass employment. Simply
put, companies need people with money
to buy their products. The second trend that
Rifkin believes will convert
employers to his cause is the slow erosion
of pension funds - currently the
largest source of investment capital in both
the U.S. and Canada - that will
occur as fewer and fewer people have long-term,
full-time jobs.

Rifkin may of course be underestimating the
relentlessly short-term focus of
most successful businessmen. Jim Pattison,
for example, has been 'exposed' to
the problems posed by the workerless economy,
but as he says, "I'm more focused
on the everyday job of competing. That's
the key to everything. When you get up
in the morning you have to compete with people
and companies from around the
world. Otherwise you're out of business."

That narrow focus on competitiveness has
left Pattison with little time to
consider whether the ideas Rifkin and others
have put forward for putting more
people to work are necessary, or even a good
idea. "You're talking big stuff
here," says Pattison. "You need to ask people
that spend their lives working on
these things. I'm not in that category."

Those in the business sector who do spend
their time thinking about these
things have so far opposed nearly all suggestions
for softening the impact of
the information revolution. Rifkin, for example,
suggests that benefits be
extended to part-time workers, both to improve
the lot of part-timers and to
discourage the overuse of this kind of employee.
The same suggestion was made by
the NDP's Thompson Commission, but the business
community's reaction was so
adverse that the Harcourt government quickly
dropped the idea.

Rifkin's plan for reducing unemployment -
shortening the work week - was
anticipated by the federal government's 1993
Donner Commission. The Donner
report found that if the work week were reduced
by 10 per cent, with a
corresponding decrease in wages, it would
result in a permanent 4.5 per cent
reduction in the rate of unemployment.

B.C.'s business community wanted none of
it. The Vancouver Sun excoriated the
report as 'a long-winded thumb sucker'. Jerry.
Lampert of the BC Business
Council rejected Donner's recommendation
out of hand, saying they were a call
for "more entitlements and less labor market
flexibility."

Stuart Nobel of the BC Labour Force Development
Board was more measured, but
as he explained in a phone interview, the
business community "has a real concern
about any reduction in working time where
there isn't also a reduction in
wages." But with wages stagnant or falling,
many workers are unable or unwilling
to take the cut in pay that would come with
reduced hours. Perhaps for this very
reason union leaders haven't been exactly
brimming over with demands to reduce
their own hours.

Rifkin believes he has a plan to square the
circle. "I'm saying we can reduce
the work week and increase pay." What's more,
Rifkin believes that businesses
will buy into his plan voluntarily.

Here's how it would work. A company would
voluntarily agree to reduce its
work week by, say, 15 per cent, and increase
employment levels by the same
amount. In return the government would agree
to pick up 100 per cent of that
company's payroll taxes for a period of,
say, five years. For the company the
deal would represent a savings. For the government
the added expense would be
more than made up by the reduction in social
welfare costs and increased income
tax. Everybody wins. Rifkin's scheme is based
upon a plan that the French
government began implementing starting September
3. Whether such a plan would
fly in B.C. remains to be seen.

Even if it does, there still won't be enough
work to go around, in Rifkin's
view. "One of the most fundamental questions
that we have to answer," he says
"is what do we do with millions of people
that the marketplace doesn't need
anymore."

He proposes that the new economy's millions
of supernumerary souls be put to
work in a revised and expanded voluntary
sector; this is not 'workfare', but
rather a wholesale reconfiguration of society.
In capitalist democracies the
private sector has traditionally been in
charge of generating wealth and the
public sector has been in charge of redistributing
it in the form of
infrastructure and social services. The volunteer,
or third sector, has been
largely overlooked.

As governments offload more and more of their
functions, however, Rifkin
predicts voluntary agencies will expand to
the point where third sector workers
will provide many of the social services
now provided by government, along with
many more, like childcare, that government
seems unable to provide. Governments'
new and limited social role would consist
of coordinating the activities of
these third sector groups and providing funding
for third sector workers.

This is the one potentially liberating aspect
of the information revolution.
Freed from the drudgery of labor for production,
people would be able to spend
their time working to rebuild and enhance
community, and in developing 'human
capital'. It's the kind of idea that just
might win support from a middle class
increasingly wary of workfare, welfare and
money-for-nothing schemes.

There are questionable aspects of this vision,
of course, not least the
requirement that people whose fondest pastime
up to this point has been
conspicuous consumption suddenly rediscover
the subtle joys of caring for their
neighbors. Perhaps an even bigger challenge
will be paying for the expanded
third sector services, for though they will
certainly be cheaper to run than
current government bureaucracies, they will
just as certainly not be free.
Paying the bills will require taxes, either
from the corporate world or from the
shrinking middle class, groups that have
always shown themselves to be
remarkably loathe to contribute to new taxes.

Rifkin believes it's a question of pay me
now or pay me later. "You have to
talk taxes," he says. "What I always argue
is that you can pay it for community,
or you can pay it for prisons. Down here
[in the U.S.] three per cent of the
adult male population is in prison or awaiting
trial. You Canadians have a
chance to avoid that."

Should 'we Canadians' ignore the problems
and opportunities presented by the
information revolution, it is likely that
the law of unintended consequences
will slap back, either in the form of increased
crime or in political
instability. Instead of living through a
tumultuous age, we will be cursed with
times that are downright interesting. That
would be bad for business.